Mayor Riley's political savvy snagged Daniel Island for the City of Charleston

Mayor Joseph P. Riley, who fought for the annexation and won, has been criticized since for his aggressive pursuit of annexations (most notably on James Island), but he has also been praised for his vision.

And he was not the first Charleston mayor to try to expand the city’s territory. Mayor J. Palmer Gaillard, recently deceased, was praised in obituaries and tributes for, among other things, his initiative in annexing parts of West Ashley during his four terms in office, from 1959 to 1975.

The mayors of North Charleston and Mt. Pleasant and the Berkeley County supervisor cried "foul" because of the tactics Riley used in late December 1990. The suburban mayors had sought to annex Daniel Island to their cities and the supervisor preferred that Daniel Island remain unincorporated, with no annexation.

Development of the island had been considered inevitable since the South Carolina Department of Transportation began drawing up plans for the Mark Clark Expressway in 1972. The highway, which would link Daniel Island to North Charleston and Mount Pleasant, was scheduled for completion in 1991.The Guggenheim Foundation, owner of the island, had announced ambitious plans to develop it in 1989.

The strategy: Riley, City Attorney William B. Regan and Assistant City Attorney Frances Cantwell put together a plan to annex Daniel Island without the consent of the Guggenheim Foundation by including adjacent Rodent and Parker Islands to comply with the state’s annexation law. The law required that the city be petitioned by at least 75 percent of the landowners representing 75 percent of the assessed value of the properties to be annexed.

Daniel Island, though much larger than the other two islands at 9.9 square miles, had an assessed value of only $25,160 because it had been used only for farming. Rodent Island, owned by developer Robert Knoth, was valued at $2,090 and adjacent marshes were valued at $7,260. Parkers Island, owned by another developer, Joseph P. Griffith, had an assessed value of $312,260, and another unnamed island was valued at $1,010. The land exclusive of Daniel Island had a value of $323,650, more than 75 percent of the total. Griffith, a friend of the mayor, agreed to divide his property among nine family members to create more owners in order to help the city meet the 75 percent of owners requirement.

***image2***Riley called an emergency city council meeting at 5 p.m. on Friday, Dec. 28, 1990, and eight city council members voted unanimously to approve the first reading of the annexation ordinance. Riley explained that the city had just received the last signed petition, and they wanted to act quickly, anticipating North Charleston was planning a similar move. (Regan claimed he had evidence of the plan, but it was never produced, and North Charleston officials denied there was such an attempt.)

Guggenheim Foundation officials were stunned by the city’s move. Dr. James A. Hester, foundation president, told the news media he first learned of it in a phone call from Riley on that Friday, and foundation board members had never been asked if they wanted to be annexed by Charleston. Dr. James B. Edwards, a member of the foundation’s board and president of the Medical University of South Carolina, said he thought the foundation might sue. An attorney for the foundation, Harold W. Jacobs of Columbia, said the city’s annexation was not legal (he didn’t explain why).

In opinion pieces published in the News and Courier Jan. 13, 1991, newly elected Supervisor James Rozier said he received a phone call from the mayor as he was dressing for his swearing-in ceremony in Berkeley County. He termed the move "unfair" because the Guggenheim Foundation hadn’t given its consent to annexation. Moreover, he said, the county had been working with the foundation on plans to provide services to the island and had incurred planning costs, but it would now need permission from Charleston to provide those services.

Mt. Pleasant Mayor Richard L. Jones complained that Charleston was "violating the spirit" of the annexation law, which was intended to facilitate annexation when parties consented. Charleston was "infringing on the obvious planning and service area" of his city, he said. North Charleston Mayor John E. Bourne, Jr., called the move "underhanded and sneaky" and said Charleston was infringing on his city’s plans to provide services. Both Jones and Bourne pointed out that there was no direct connection between Charleston and Daniel Island except by boat, and Charleston employees would have to take the Mark Clark Expressway through their cities to get to the island.

In their opinion pieces, each mayor stated the case for annexation to his city. North Charleston set high standards but was "developer friendly," Bourne said. It had increased its size by 700 percent in the 18 years since its incorporation and yet it had maintained a lower tax levy than Charleston. It was rapidly becoming the business and shopping center area of the region, as well as the job market center, he said. Jones said Mt. Pleasant had added more than 6,000 acres in the previous months, and touted the town’s quality planning, services and affordable tax rate. He noted that one part of the annexation package, Parker Island, was almost surrounded by Mt. Pleasant. Both mayors said their cities were ready to provide services to Daniel Island.

Riley also stated Charleston’s case an opinion piece and explained his aggressiveness in pursuing the annexation for the city. Berkeley County would not lose, he said, because Daniel Island would remain in the county. But future Daniel Islanders, if they formed an independent city, would have to pay a city staff and provide buildings to house them in order to provide services that were available from the nearby cities – an approach that would not be very cost-effective. He did not criticize the other two cities but maintained that Charleston, with the largest police and fire departments and largest recreation department in the area, could provide more cost-effective service to the island.

Riley explained that his obligation to the city was to ensure that it would be able to grow. As the central city of the metropolitan area, Charleston houses and provides expensive services for many public and non-profit institutions that serve the entire metro area but are not on the tax rolls – the Medical University, the College of Charleston and the Citadel, the Charleston Symphony Orchestra, Charleston Museum and Gibbes Museum of Art, the parks, major festivals and more. Forty percent of peninsula real estate was tax exempt at the time, he said. In order to avoid the fate of other central cities with shrinking tax bases, Charleston would have to expand its tax base to cover its costs.

In the end, the Guggenheim Foundation didn’t sue. Instead, it asked the Charleston City Council to delay a final vote on the annexation while it considered the options. The cities didn’t sue either, because they didn’t have legal standing to do so – only the subjects of the annexation could have done so, Regan said.

The foundation had fended off annexation overtures from all three of the cities since 1989, and in 1990 they were waiting for the South Carolina Port Authority’s decision on where it would build a new port facility. One location the SPA was considering was the northern part of Daniel Island, which it could take by condemnation. That would have ruined the foundation’s plan for a new community. But the foundation was also under pressure to sell the property, since under federal law governing non-profits, they could not maintain ownership of a profit-making entity.

The foundation eventually decided in Charleston’s favor and signed a petition requesting the annexation after the city agreed to pay the owners $1 million in 1994 for 210 acres, and to build parks and provide municipal buildings at a projected cost of $12 million over the 12-year development period for the project.

Charleston’s original annexation had been perfectly legal, Regan maintained, and it mirrored the annexation of John’s Island, which had been upheld by the Supreme Court. Another argument strengthening Charleston’s case was reported in a News and Courier article Jan. 10, 1991. Hester said Riley had told him that the city had a legal claim on the dredge disposal area at the southern tip of Daniel Island because the silt was dredged up from the bottom of Charleston Harbor. The city could claim the highlands created by the silt because the state had granted it ownership back in the 1830s or 1840s.

Hester explained the foundation’s decision to a reporter on Feb. 22, 1991:

"We understand better now than we did then the historic importance of Daniel Island to the city of Charleston," he said. " . . . If Charleston is going to grow, Daniel Island is the way that is available. It was of enormous historic importance to the city of Charleston to initiate the annexation."

Charleston had one more challenge in its bid to annex Daniel Island. The Charleston branch of the NAACP and City Councilman Robert Ford sent letters to the U.S. Justice Department complaining that development and zoning plans for Daniel Island didn’t include housing that would be affordable for most black citizens. The development of the island would bring in 20,000 to 30,000 new residents, most of whom would be white, and consequently, the annexation would have a negative impact on African-American voting strength. The Justice Department, however, did not find evidence that the development would diminish the voting strength of African-Americans.

The Guggenheim Foundation hired the architects and planners to put together the original plan for the island, then formed the Daniel Island Development Co. to develop it and sold the land to the development company, retaining a small interest. In an agreement with the city, the Daniel Island Development Co. agreed to use 10 percent of its profits to set up a fund with the Trident Community Foundation to support affordable housing and minority small-business development in order to reduce the impact on nearby low-to-moderate income communities near Daniel Island. Controversy arose again in 1997 when the Daniel Island Development Co. (headed by John Alschuler with Matt Sloan as vice president) sold most of the island to The Daniel Island Co. headed by Frank Brumley, who had been a consultant to the development company. The new company reached an agreement with the city that allowed them to reduce the percentage of affordable housing from 10 percent to 5 percent. The company pledged to uphold a commitment to sell 20 acres to the city at cost for affordable housing and to make a $100,000 contribution to the Trident Community Foundation, according to Brumley.

Hester’s vision for Daniel Island fit well with Riley’s dreams for the City of Charleston. Hester, a North Carolina native who had lived in Charleston as a boy, saw an opportunity to create a model community incorporating intelligent design principles for urban living and best practices for environmental preservation.

Riley wanted a community that was "not gated, but open and inclusive," Brumley said, "And Hester agreed. There was never any pushing or pulling."

Hester served in the US Marine Corps during World War II and taught democracy in Japanese schools after the war. A Rhodes Scholar, he earned a doctorate at Oxford University. He became a consultant for the Gallup Co. and then dean and president of New York University. As first rector of the United Nations University and then as President of NY Botanical Gardens, he became concerned about environmental degradation and brought that concern and a love of plants to the development of plans for the future of Daniel Island.

Charleston’s success in annexing Daniel Island can be attributed in part to the efforts of the city attorney and assistant city attorney – Riley called Regan and Cantwell "two of the best annexation lawyers in the state." Interestingly, Henry B. Smythe, the primary attorney for the Guggenheim Foundation, had been Charleston’s city attorney during Mayor Gaillard’s administration, when the city first annexed portions of West Ashley. Smythe’s son, Henry B. Smythe, Jr., was a city council member, and another council member, Burnette Maybank, had been Hester’s schoolmate.

Brumley also praised Cantwell and Regan, along with Yvonne Fortenberry and Lee Batchelder of the city staff.

"The mayor’s efforts were really crucial," Brumley said in a recent interview. "The mayor is a true visionary."

"There really was not a battle," said Sloan, chief operating officer of the Daniel Island Co. "The city took the foundation by surprise and the foundation wanted to make sure the annexation was in its interests. A reasonably quick study concluded that it was. The city promptly came to the table with commitments for water and sewer service – hard to start a development without that. I was part of the foundations consulting team. Everyone was very impressed with the vision the mayor had for the island. It was very clear that Daniel Island helped fill a certain niche within the municipality."

Would Daniel Island be what it is today if it had been annexed by either Mount Pleasant or North Charleston, or stayed unannexed in Berkeley County?

"It might be different," Brumley said. "It would have been very successful either way. The important thing is that it gives us a connection with the City of Charleston and that gives us a national reputation. There’s not another community like Charleston in the US, and if you can have a Charleston address, that’s very positive from a marketing standpoint."

"Hard to say," said Sloan. "Much of what you see here is a result of our master plan, and that was very progressive, particularly in the early nineties. The Mayor either has been a planner in a past life or should be in the next. We were able to introduce a wide array of new planning principles involving street sections, setbacks, mixed uses, etc. that were very well received as a result of the Mayor’s vision for this community."

"Beyond the build environment, we market Daniel Island on a national stage, and the intrinsic benefits of a Charleston address are, in our estimation, quite substantial. Frankly, it is instant credibility in many of the communities we market in. Charleston enjoys as fine a reputation as anyplace in America," Sloan said.

Things might be different as regards the Family Circle Tennis Cup, however, according to Sloan.

"First of all I think it’s clear they would not be in the City if it were not for Daniel Island. There were not other locations within city limits that worked. That being said, the FCC in particular would not have happened without the city. The city brought resources to the table by participating in a joint bond issue and financing involving the Family Circle ownership, the state, the Daniel Island community, and the city."

The city also arranged for fast track permitting for SunCom and helped lure other businesses with fees in lieu of taxes, Sloan said.

"I think what he did was courageous," Sloan continued. "He extended political capital and took the expected flack from opponents and from the media. However, he felt the city needed to grow. He needed places for big business, large events, middle class bedroom communities, etc. He saw Daniel Island as a means to accomplish all that and help secure the tax base. Also, given his pro-development nature and appreciation of community design, Daniel Island for him, like us, is a really exciting opportunity to apply best practices. We are an award-winning community and the first person recognized whenever we are so fortunate is always the mayor. He refers to Daniel Island as his Louisiana Purchase. I think that is actually pretty on-target," Sloan said. "I think Charleston is better with Daniel Island as a part of it and I think that view is pretty prevalent."

Is there a comparison to be made between James Island today and Daniel Island in 1990?

"Apples and oranges," Sloan said. "We were totally uninhabited. Nobody was impacted.

Losers in the annexation fight have generally prospered since. The City of Mount Pleasant recently placed 70^th on the CNN/Money magazine list of the 100 Best Places to Live in the US list in the small cities category, without Daniel Island. Berkeley County has continued to receive tax revenues from the island, which now is a principal part of the county’s tax base—and still growing. North Charleston was a loser in attempts to woo Daniel Island, but it has continued to expand elsewhere and is now the state’s third-largest municipality. The city’s web site boasts that it "might become known as South Carolina’s most notable ‘boom town.’"

But for now, that designation may go to Daniel Island.

Much of the information in this story was obtained from articles published between 1989 and 1999 in the Charleston News and Courier, the Charleston Post and Courier and the New York Times.